Relying entirely on accounting tools and understanding the subject can be one of the costliest mistakes you can make in your business. Working with a licensed and qualified accountant can save your business from many unwanted situations and help reduce your tax bill.
When you decide that you need the services of a professional accountant or bookkeeper, you must have a clear picture in your head about what to ask them and when. It is essential because you want to ensure what’s best for the business, and asking the right questions is the first step in this process. Here are some key questions you should ask an accountant before hiring them for their services.
Working with an Accountant – Key Questions
What will be the mode of communication, and how often do we need to be in touch?
This might seem like an obvious question. However, effective communication is the key to building a healthy relationship with your accountant. Decide early on about your need to meet face-to-face or via calls or emails. The frequency of your meetings should also be decided in case the accountant is working for you part-time. Even if you have hired a full-time accountant, you must schedule a weekly meeting to understand how your business has been performing.
How can working with an accountant save you from excessive tax liabilities?
Preparing your documents to file tax returns is a tedious process that usually requires a professional accountant’s services. You must always ask accountants about their plan to save you from excessive tax burdens and file an unblemished record of your financials. An accountant can help you decide on your tax credits or deductions, which can be claimed, and any new laws that can help your business.
What are some key areas that need to be regularly consulted?
A professional accountant can understand the dynamics of your business early and should be able to keep you informed about the critical factors that can affect your business. Your accountant should have detailed knowledge of corporate taxing, financial modeling, HR planning, and GAAP. While working with an accountant, they must be able to help you make confident decisions, like hiring a full or part-time contractor and renting or buying a particular property.
The key is collaboration, and if your accountant can work with you and convey information without any confusion, you might taste success sooner than you think.
How do I nurture my business?
For development, it is necessary to build a financial model from scratch, exactly to the requirements of your business. The model should be realistic and must account for strengths and weaknesses. You don’t want your business to be performing well on paper while failing in reality. Explain the current scenario and your future ambitions for your accountant and ask for a financial plan to help achieve those objectives.
What is the plan to manage the cash flow?
The job of an accountant is to manage your current cash flows and forecast the future ones. A plan needs to be devised so there is always room to maneuver when the times are tough, and you are not stuck. All your receivables and payables go through an accountant’s system, and nothing should go overlooked or missing.
What is the value of my business?
DCF (Discounted cash flow analysis) is a method accountants use to evaluate a business. Apart from your tangible assets, an accountant must be able to estimate your business’s fair market value correctly. Based on the overall value, you can further identify the aspects of your business that offer the maximum value.
An accountant may require time to value your business accurately, so don’t expect an immediate answer. Working with an accountant to assess the valuable aspects of the business can be advantageous in the overall scheme of operations.
Are accountants of any help in reviewing and negotiating business contracts?
This question is more related to legal matters and should be asked by your attorney. However, some of the financial matters in a contract must also go through an accountant. The attorney and accountant, with your collaboration, must be able to determine a contract’s legal and financial boundaries correctly. Critically scrutinize each contract for any possible clauses or points that could hurt your business in the future.
What are some special considerations while working with an accountant?
Every business has its unique needs, which require a specific approach. Similarly, the accountant must feel comfortable working with you to give 100%. Be honest with your accountant; don’t hide anything because things will be disclosed during auditing. Also, if you want your accountant to help the business develop, take care of their concerns, and talk to them if they have any issues.
Conclusion
The key to your business success depends on working collaboratively with an accountant. Asking the right questions at the start will ensure that you hire someone aligned with your goals and who can handle all of the business’s financial matters.
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